Australians are bleeding from higher taxes constructed to pay for the lack of courage displayed by big-spending territory, state and federal leaders whose budgets are drowning in debt and deficit.
Households and businesses, which in recent years have focused on their own budgets during a cost-of-living crisis, are being forced to carry a bigger burden by governments that have squibbed tough reforms and relied on “golden goose” commodities for too long.
After Canberrans handed Andrew Barr’s Labor a seventh consecutive term last year, the ACT government’s latest budget didn’t bother disguising its economic vandalism.
Despite federal Labor accusing Peter Dutton during the election campaign of having secret plans to undermine universal healthcare, the ACT government has hit residents with an annual $250 public hospital tax to prop up one of the country’s worst health systems.
Barr’s deficit-laden budget included hikes to everything: general rates, a safer families levy, the emergency services levy, car rego, driver's licence renewals, parking, an ambulance levy, occupation licence fees … the list goes on.
Credit ratings agency S&P on Wednesday issued a warning that “fiscal controls (in the ACT) are loosening” and the territory was “unlikely to return to cash operating surpluses for some time”, despite Barr’s ambitious forecasts.
“Rising operating costs, particularly on health services, and higher spending on infrastructure could push debt above our previous expectations and further erode the headroom for our rating on ACT,” an S&P Global Ratings notice said.
The nightmare budget outlook is shared by other states and territories, excluding the mining-rich Western Australia.
Australians who have drifted from caring about governments balancing budgets should look at the ACT, Victoria and other states and beware that unless treasurers and leaders take bolder action, politicians and bureaucrats will always opt for the lazy option and dispatch the tax man in much harsher ways.
Asked on Wednesday whether the ACT government’s $250 health levy was proof Labor and not the Coalition had violated the principle of universal healthcare, federal Health Minister Mark Butler said: “At the end of the day, that government is accountable to the burghers of the ACT for decisions they take in their budget”.
After winning a historic 94 seats in his May 3 election landslide victory, Anthony Albanese has set Jim Chalmers a critically important challenge.
The Prime Minister’s three-day economic reform roundtable in August carries high hopes that Chalmers can broker peace between warring business and union leaders, win a consensus on a new ambitious economic reform agenda that will lift flatlining productivity and economic growth and put the federal budget back on a path to surplus, modernise the country’s outdated tax system and examine the fairness of the GST funding model.
With federal Labor rebuilding relationships with business after hitting them with union-backed industrial relations laws during the first-term Albanese government, Chalmers is under maximum pressure to land tangible reforms that shield taxpayers and business owners from global shocks and a deteriorating economic outlook.
Chalmers says he’s ready to tackle reform – we’ll see
The Coalition is willing to work with the government in good faith on sensible economic reform. For now, I will give the Treasurer the benefit of the doubt that he is genuine about building consensus.
Lift defence spending to serve the national interest
Missing in the current debate over defence capabilities is any sense of urgency from the Albanese government. The Australian Defence Force needs greater firepower, sooner rather than later.